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Merger Modelling Course


The pricing of public M&A transactions is critically affected by expectations of earnings accretion. Indeed this question of how accretive a deal is for a purchaser is an important part of the fair value judgements by advisers to vendors. During the course, delegates will construct a flexible model capable of calculating the pro-forma credit ratios, combined profit metrics and earnings accretion for a takeover or merger. As well we will build sufficient functionality into the model to identify the optimal capital structure to be used to finance the acquisition.

Prior attendance on a Practical Financial Modelling course is required.


At the end of the course, delegates will:

  • Understand current merger accounting rules and particularly the significance of modern fair value accounting on the income statement and how it potentially will distort comparable company analysis
  • Be able to implement a six step approach to building a pro-forma consolidation model
  • Understand the significance of the P/E of cash and how to use it to quickly assess merger feasibility
  • Be able to model the impact of revenue and cost synergies and also the cost and tax impact of debt financing
  • Be able to explain some of the key practical issues regarding the use of equity financing in listed company transactions

Who should attend?

  • Finance and accounting
  • Corporate finance trainees
  • Trainee equity analysts
  • Investment professionals
  • Trainee credit analysts


  • Building a quick model – bidder PE vs. offer PE vs. PE of cash
  • Pro forma capital structure – what drives the mix of cash and equity funding?
  • A modular approach to a full model:
  •           - Sources and uses
              - Fair value accounting considerations
              - Reverse takeovers
              - Goodwill calculation – the rules, existing stakes and non-controlling interests
              - Synergies and additional costs and tax impacts
              - Funding the acquisition interest costs and the tax benefits
              - EPS accretion and synergies required for nil dilution
  • Optimal capital structure
  • Sensitivities